OFW inflows boost peso

By Des Ferriols
The Philippine Star 04/05/2006

Strong inflows from overseas Filipino workers (OFWs) sent the peso hitting beyond the 51-to-$1 mark yesterday, touching a high of 50.95 during intraday trading before closing at 51.045 to a dollar.

The peso has been trading sideways for about a month but the market saw strong inflows from OFWs yesterday, possibly in anticipation of the reopening of classes in June.

The inflow of OFW remittances washed over the dollar demand which is usually weak this time of month anyway.

The local currency last showed this much strength in March 7 this year when the exchange rate hit an intraday high of 50.88 to the dollar.

The peso has appreciated by as much as 4.2 percent so far this year and despite some issues in the political front, the financial market is still upbeat over the country’s economic fundamentals.

Market sources said strong economic fundamentals had fanned more optimism in the market, especially after the Arroyo administration reported that its consolidated deficit was even better- than- expected.

Inflation was also expected to slowdown in March as local oil prices eased.

OFW inflows are usually strongest in March as families spend for graduations and in May when workers send more money in preparation for the reopening of schools in June. OFW remittances pick up again towards the Christmas holidays.

With strong inflows and moderate corporate demand combined with market optimism, BSP Governor Amando M. Tetangco said the peso would continue to find support over the next few weeks.

http://www.philstar.com/philstar/news200604050701.htm